Whither Hostess Brands?

Most have probably heard today’s news that Hostess Brands is going out of business. This is sad news on many fronts, the most significant of which is the loss of livelihood for some 18,000 individuals.

Hostess Brands owns a number of well-known, if not famous, trademarks and brands, including TWINKIES for cakes, WONDER for bread, and even its own house mark, HOSTESS. One area of trademark law that is often only considered in times of necessity is what happens to trademarks when businesses cease to exist? In this case, I read with interest the following paragraphs from the Wall Street Journal’s coverage of the Hostess bankruptcy:

Adam Hanft, a branding strategist behind Hanft Projects, sees the potential for new life in the death of a decades-old company. A fresh owner of the intellectual property, which includes everything from names to recipes to graphics, could revitalize the Hostess brands, which Mr. Hanft sees as weakened but not lacking potential. He raised the prospect of new flavors, limited-edition Twinkies, products co-branded with independent music groups and the potential for an international reach.

“Its nutritional emptiness in the right hands could be its core strength,” he said, explaining that a buyer that embraces the brand’s “kitschy,” “deliciously retro” feel could be rewarded. He foresees a potentially diverse crowd of bidders for the property.

“It’s the kind of iconic brand that might attract people who might not otherwise be interested in owning a consumer good,” Mr. Hanft said.

What happens to the Hostess brands is likely to be a bit of a sideshow in the overall bankruptcy, probably as it should be. As the company’s CEO has pointed out, numerous factors have contributed to the business’s failure, and it is therefore difficult to see the business case for a single company or group of investors simply picking up where Hostess is leaving off. Having said that, there is clearly a significant amount of goodwill and value in the Hostess trademarks alone. Commenters across the spectrum are already lamenting the imminent loss of so many names packed with so much goodwill: Twinkies, Ho Hos, Ding Dongs/Ring Dings (for some history of these names see here), Wonder Bread, Dolly Madison, Zingers, Sno Balls, Suzy Q’s, etc. It is a long list, and hopefully some of these icons will live on, and those individuals who have brought them to us will land on their feet.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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